It's well known that the proposed Futenma Marine Air Station relocation is causing problems in the US-Japan alliance. The photo above, courtesy of Wikipedia, shows just why it needs to be moved.

Recently, six developments in Japan's newly dynamic politics suggest this hot button issue has a better chance of being solved, putting the crucial alliance relationship back on firmer ground:

1. The DPJ may no longer need to rely on the Social Democratic Party of Japan in the Upper House, as the DPJ may have been able to convince enough other Upper House members to cross the floor and join them.
2. The Social Democrats themselves are softening their 'all US bases out of Japan' rhetoric and are willing to consider alternate sites for Futenma.
3. In line with Prime Minister Hatoyama's pledge to solve the Futenma issue by May, his new Government is actively considering this relocation plan.
4. The DPJ's poll ratings across Japan are plummeting fast on the back of corruption scandals and discomfort over the Government's destabilising of the alliance with the US. This may make the DPJ more willing to push against local opposition to relocation plans within Okinawa.
5. The heaviest of the DPJ heavyweights, Ozawa Ichiro, has been one of the loudest voices against relocation. However, his chances of replacing Hatoyama have been seriously damaged by corruption scandals. Nearly 80% of people polled by Japan's leading newspaper, Yomiuri Shinbum, want Ozawa to resign. Solving Futenma could provide Hatoyama a nationally popular way to prove that he is not under Ozawa's thumb.
6. So far, the focus on Futenma has greatly limited public discussion and criticism in Japan of the escalating relocation costs from Japan to Guam, initially estimated at over US$6 billion. 

Successive Australian governments have taken comfort that global economic and strategic power is shifting to Asia and hence closer to Australia. (At times, they have also feared this shift – ie. the 2009 Defence White Paper.)

Over the past few months, though, I have been troubled by the idea that, while power is shifting to Asia, within Asia it is shifting away from Australia both geographically (to the north and west of the Asian landmass) and diplomatically, as our traditional partners in Asia (Japan, South Korea, Singapore, Indonesia) lose relative power to Asian states we have weaker strategic ties with, such as China, India, Russia and Iran.

Anthony Bubalo and I have a piece in the next issue of The American Interest looking at how the idea of Asia is moving away from the traditional Australian view, and last Wednesday I discussed this issue at the Lowy Institute.

Adding to this theme, potentially big things are happening in the Arctic. A recent report by SIPRI's China research team looks at the PRC’s growing interest in the Northeast trade passage. Last summer, two German cargo ships made the first voyage through this passage that links Northeast Asia to Europe, while the Russians are planning to send its first shipment of oil through the Arctic to Japan this summer.

Russia has the world's biggest fleet of ice breakers and sees its vast Arctic territories as a new economic asset. The PRC is also investing more in ice breakers in the hope that the Northeast Passage may become a real passage for trade between Asia and Europe, one that is closer and geo-strategically less complicated than Asia's traditional maritime routes, which are closer to Australia.

Photo by Flickr user MarcelGermain, used under a Creative Commons license.

As often happens when I read Sam's posts, I paused, slightly confused. 

Are major bilateral relations really only an 'ephemeral' part of foreign policy for a self-described middle-power like Australia? Therefore, is Australian foreign and security policy also wilfully ephemeral due to the bipartisan commitment to the US alliance relationship as its cornerstone?

Isn't one of the main, if not the main, reasons why the APc initiative has failed to gather much official support outside Canberra because the Rudd Government did not first gain support for it from these major powers at the other end of these ephemeral relations? This is the point of the Indian (not Singaporean) commentator cited by Rowan Callick.

Reinforcing this point is the fact that the Hatoyama Government, which came to power more than a year after the initial APc speech, is pushing a very different regional initiative which it did not discuss with Canberra beforehand. Yet Japan is traditionally our least ephemeral relationship when it comes to regional institution-building.

Strikes me if you don't get your major relationships right, especially if you are a self-described middle power, your larger plans for new institutions and initiatives involving these potential partners could well falter. This is even more so if the other potential participants in your initiatives do not see the structural shifts or the best way to address them in the same manner as you.

Photo by Flickr user scroy65, used under a Creative Commons license.

One of the big questions to come out of the wash of the GFC is, will domestic (particularly consumer) consumption in the PRC expand significantly to help moderate global imbalances and provide a powerful new source of domestic and global demand while the traditional engines of global growth stay in neutral or first gear?

According to an insightful post on the new Caing blog in China, the answer is 'yes', particularly outside the major coastal cities. It also notes that currency appreciation would definitely help.

(NB. Caing is a new news venture featuring the editorial team that used to lead Caijing magazine).

Photo by Flickr user stoicviking, used under a Creative Commons license.

The new DPJ Government in Japan is having a rough time. It is plummeting in the polls, it just lost its finance minister while its new one has spooked jittery financial markets as well as his leader, and it is letting domestic and partisan politics have much too much sway in its alliance relationship with the US, the supposed cornerstone of Japan's foreign and security policy.

On one important front though, it is making progress. The Japanese Government recently decided to pass on to Seoul documents covering the practices of Japanese private firms 'employing' Korean workers in World War II.

This politically brave decision is consistent with the Hatoyama Government's push for Japan to seek better relations with the PRC and South Korea. If Tokyo continues in this vein, it should help South Korean president Lee Myung-bak's own efforts to forge better relations with Japan, relations that do not forget or ignore history but ones that are not trapped by unresolved historical grievances.

BTW, Peter Alford from The Australian – the only Australian newspaper correspondent in Japan — provides some useful insight into how the new DPJ Government is approaching the whaling issue.

Earlier today, Sam put up a link to Joseph Nye's sober argument that Washington should not risk damaging the US-Japan alliance by pushing the new (and still on training wheels) Hatoyama Government on the 'second order' Futenma issue, despite Hatoyama's reckless election promise to ditch a deal agreed upon by both governments after torturous negotiations a full three years before his campaign run. 

The Rudd Government faces a similar Tokyo challenge with a third (or fourth or fifth) order issue: the annual Government-supported Japanese whale hunt in the Southern Ocean.

So far, we have had the opposition, both the reliably sensationalist Greens and Greg Hunt of the Liberals, calling on the Government to limit commercial freedoms by banning planes commercially contracted to carry out reconnaissance for the Japanese whale hunt from using Australian airports. (I wonder how would this limitation on commercial freedom be imposed and monitored?)

Joel Rathus' piquant response to my latest post got me thinking beyond my regular concern that ASEAN voices demand centrality and then ask others to fund it. East Asia, if one could ever actually define this term, seems to have almost as many 'odd men out' as it does in.

Joel nominates Japan, the region's largest economy (in market exchange rate terms), investor and aid giver as one rather large odd man along with the Oceania pair, Australia and New Zealand. To this list of supposed outcasts, one can add the hefty and rising India (in the East Asia Summit and a supporter of the Economic Research Institute for ASEAN and East Asia [ERIA], owner of the Andaman islands, powerful civilizational force, over 1 billion people), the city-state of Singapore (in but not of South East Asia), alienated Taiwan (with a population larger than Australia), ignored Mongolia and the pariahs, Myanmar and the DPRK.

Then there is the whole question of whether the only global superpower, the US, is in or out. And if out, how far out? We also have the torturous membership question of continent-spanning Russia. And, of course, there is the region's newest state, Timor Leste, as well as PNG (a country that shares an island with Indonesia). Hmmm, maybe PNG, geographically speaking, has a better claim to being 'East Asian' than we do?

Who are the 'in men' left? the remaining eight ASEANs, South Korea and the PRC?

Given this conceptual mess, one that is greater than the alphabet soup of institutions it has spawned, I still think it is a good investment by Australia to put $1 million into ERIA to fund research into regional economic integration, especially given the long history of Australia-Japan cooperation in this area and the competing push for an East Asian Free Trade Agreement that excludes Australia, New Zealand and India.

Photo by Flickr user David Wulff, used under a Creative Commons license.

I would like to thank Richard Woolcott for responding to my views as a participant at the APc conference at Taronga, particularly since I have not had the chance to discuss the APc initiative with him yet.

Having organised and hosted conferences myself (though never on the scale or with the stunning harbour view of the APc one), I am also glad that Richard Woolcott judges the conference a success. I await the conference report to see where the government's APc initiative is heading, post-Taronga.

I would also like to nominate another recent Australian regionalism success, one that may have been lost in the build-up to the APc conference. At the APEC Summit in Singapore in November, Trade Minister Simon Crean announced that Australia would provide $1 million to the research institute associated with the East Asia Summit, ERIA (the Economic Research Institute for ASEAN and East Asia), based in Jakarta at the ASEAN Secretariat.

This follows New Zealand's offer of NZ$100,000 for ERIA in June and India's US$1 million announced at the East Asia Summit meeting in Thailand. Japan provides the lion's share of funding to ERIA.

One of the weaknesses of the existing alphabet soup of regional organisations is in research capacity. ERIA is an attempt to address this problem among the East Asia Summit members and it is good news that Canberra is joining with Tokyo, Wellington, New Delhi and the ASEAN Secretariat in supporting this research institute and thereby helping strengthen the role of the EAS as well.

Carl Thayer writes in response to my post about the recent conference to discuss Prime Minister Rudd's Asia Pacific community (APc) proposal:

I do not think there is an official ASEAN position on the APc. It is clear that there is no ASEAN consensus on the idea because it has not been discussed as an agenda item at ASEAN foreign ministerial level. I wasn’t invited to the APc conference at Sydney but a discerning participant surely would have picked up national differences on the APc proposal. 

But I agree with Malcolm that the rough going the Prime Minister will face is mainly his own doing.The Australian media wasn't properly briefed when it was first launched.They thought it was all about an EU-type institution. One South Australian paper called it an Asian NATO! As far as I am aware there were no focus group discussions in Australia among strategic analysts, academics and the business community.

And don’t over-credit 'ASEAN' opposition to the idea. Singapore’s Barry Desker declared it 'dead in the water'. Surely Singapore must have been firing blanks.

Thanks, Carl, for your comments and I'm glad The Interpreter is playing the role of being the forum for critical analysis of the APc initiative.

They fall into two categories: one I was wrong about and one that surprises me.

Wrong: I thought the GFC would have a greater impact on the PRC and its hybrid economy. It now looks like Beijing will actually do as it promised its subjects – keep the GDP growth rate for 2009 at or above 8%. Congrats to the PRC and boo to me. Shows I should read more carefully the the publications that I edited for my own Lowy Institute program.

Surprised:  I am surprised how few foreign leaders visited Australia in 2009 (or, for that matter, since the first change of government in Australia since 1996), especially from the major regional powers that so exercise the Government when it comes to the APc and the Defence White Paper.

Photo by Flickr user Mori Yama, used under a Creative Commons license.

Over the last week, I have been consumed by discussion (or, more often, long and rambling monologues) around PM Rudd's Asia-Pacific community (APc) initiative and the question of Australia and regional institutions. I first attended the Asia-Pacific community conference here in Sydney and then I flew off to be part of the Australian delegation to the Australia-New Zealand-ASEAN dialogue in Kuala Lumpur.

It is not a week I would wish to repeat, but each gathering did emphasise two separate and serious problems for the APc and Australia's regionalist urges, which are brought out even more when one compares the run-up to APEC in 1989 to the APc initiative's short and so far largely unsuccessful existence.

The Sydney conference over the weekend (which the Lowy Institute was involved in) emphasised the first problem. Such government-funded conferences (and speechifying by leaders on big new foreign policy ideas like the APc) work best when preceeded by intense private diplomacy to gain concrete support for the idea before it is announced and then discussed.

For a country the size of Australia (not small but not big), located near but not in Asia, gaining prior support for your regional ideas from major Asian states with similar strategic outlooks (say Indonesia or Japan) is particularly advisable. This was the APEC story.

In the case of the APc, it seems that speechifying and conferencing are seen as feasible alternatives to intense diplomacy. Yet so far, no capital beyond Canberra has fully bought into the APc initiative, despite many sharing the geo-strategic concerns underpinning the idea. From the very beginning, the APc has been seriously undercut by bad policy planning and implementation in Canberra. This problem is growing, not diminishing.

Looking closely at Fergus' poll numbers on foreign takeovers by state-owned firms into Australia and into the People’s Republic of China, three things occur to me. One is good for China's integration into the world, one is bad for Western integration with China, and one is bad for Northeast Asian harmony and Prime Minister Hatoyama's dream of an East Asian community centred on Japan and the PRC.

On the good side, Chinese respondents seem genuinely more supportive than Australians of foreign state-owned firms investing in their homeland. When it comes to Singapore (note to Singapore Inc.), a majority of Chinese were in favour while a plurality was in favour of such investment from Canada (note to Alberta’s Heritage Fund).

In the case of the Australians we polled in 2008, majorities opposed investment of this type from each country listed as an option. Australians were the least cool towards state corporations from the UK, but even then 53% were opposed and only 43% were in favour. The US followed with 63% and 34% respectively. I wonder if this shows a warmer attitude in China towards foreign investment in general, or if it is simply that they are more familiar and in favour of state corporations?

In an earlier post, Graeme Dobell argues that the Obama administration’s decision to sign the Treaty of Amity and Cooperation (TAC) strengthens the United States’ hand in the Asian architecture game. I fully agree and take it even further. The United States signing of the TAC, especially if it is ratified, could also provide the win-win solution to fusing Prime Minister Rudd’s idea for an Asia-Pacific community  and Prime Minister Hatoyama’s idea for an East Asian Community.

Two questions have bedevilled regional architecture since the formation of APEC — should the US be included and should new institutions be created to make up for the weaknesses of the existing one(s) or should the focus be on strengthening these.

The Rudd initiative hit rough water over the latter and Hatoyama’s over the first. Rudd’s initiative is clear on the central role the United States will play in the APc, while it is becoming clearer that the East Asian Summit is the chosen regional body for Hatoyama’s East Asian Community idea, one that still excludes the United States.

If the United States is invited to the East Asia Summit, this could solve the Rudd initiative’s institutional problem. The EAS would then be transformed into an already existing regional institution that includes the major powers in the region, including India. It would also force Hatoyama to either include the United States in the East Asian Community in a more comprehensive manner or ditch the Japanese-led East Asia Summit as its vehicle, something that would be hard for Tokyo to do.

The ASEAN foreign ministers can help deliver this win-win solution and maintain their claim to ASEAN centrality by inviting the United States to the East Asia Summit. Washington can help this by ratifying the TAC and Canberra by tying the Asia-Pacific community idea to the expansion of the EAS to include the United States. Where this leaves APEC when it meets next in Yokohama and then in 2011 in the United States is another question. 

Photo by Flickr user ajgelado, used under a Creative Commons license.

I have just come from a session on regional security architecture. There was much discussion about the role of the US alliances in East Asia, with the standard criticism from Chinese and Southeast Asian participants that these alliances are exclusive, outdated, backward-looking, needing to be phased out and even potentially destabilising to the region's potential for harmonious mutlilateralism. 

Strangely, no mention was made of the other exclusive, historically-based, potentially outdated and destablising alliance, that between the People's Republic of China and the Democratic People's Republic of Korea. This is despite the fact that the DPRK is the most threatening state in the region and that the alliance contributes to the PRC's diplomatic cover for the DPRK.

Seems to me there is a dangerous and intellectually unsustainable double standard at work here.

Photo by Flickr user Wolfgang Wildner, used under a Creative Commons license.

Mark’s latest post shows the benefits of applying cold, hard economic logic to the woollier world of international politics and the UN.

I think the FCO could take it further. Instead of selling the permanent seat, why not rent the UK's veto (conferred by its ownership of a permanent seat on the Security Council) to other members on issues of particular importance to them. This would be riskier in terms of future cash flows but would allow the FCO to benefit from other members' particular sensitivities to Council issues (issues that, as a permanent member, the UK could even table for them).

Over time, this could allow the FCO to raise even more money from its control of this international political rent, and also exercise the veto itself when there are issues it is concerned enough about not to flog off its veto to the highest bidder.

One step further: the FCO could even offer to sell its use of the veto on particular issues to non-UN members like Taiwan or a multinational firm. By increasing the pool of customers, this would raise the price of the veto itself, a true win-win solution.

Photo by Flickr user justlibby, used under a Creative Commons license.

The National Bureau of Asian Research (NBR) has just released this excellent, sober appraisal of the US-Japan alliance. It is the best think tank report I have read this year!

The report puts into much sharper distinction the alliance management issues between the newish Obama Administration and the very new Hatoyama one, reaffirms the sense of regional strategic uncertainty and potential danger that haunts Australia's latest Defence White Paper, echoes Rory's concerns about the tensions between credible extended deterrence and nuclear non-proliferation, and reinforces my worries about Japanese and American approaches to the Six-Party Talks.

Photo by Flickr user Ben Ward, used under a Creative Commons license.

I have been watching carefully to see how new left-leaning governments in Australia, the US and now Japan would position themselves on a range of issues in order to forge closer relations with the People's Republic of China. It seems that when it comes to dealing with visits from the Dalai Lama, they are in lock-step.

In September, President Obama announced he would not meet the Dalai Lama during his October visit to Washington. In October, Prime Minister Rudd quietly announced the same for when the Dalai Lama visits our shores in far off December. Now Prime Minister Hatoyama has also passed on the opportunity to meet the Dalai Lama, instead passing him a message of support. In opposition, Hatoyama took a very different position.

Will Prime Minister John Key in New Zealand (head of a right-leaning government) fall into line as well?

Photo by Flickr user ruminatrix, used under a Creative Commons license.

As one of the Lowy Institute's admitted football tragics, I was chuffed to read last night that the English Premier League and my favourite team Arsenal are contributing to peace in the Niger Delta.

In a story in last week's Economist entitled 'A Chance to End the Delta Rebellion', the local coordinator of the amnesty program notes that, in the resettlement camp for former rebels, they have set up big screens to watch football matches. Chelsea vs. Arsenal 'will take their minds off evil', says the coordinator. Of course, both Chelsea and Arsenal have benefitted from some of Africa's greatest present-day footballers, including Nigeria’s own Kanu.

Alas, research by some other football tragics suggests that players with a history of exposure to civil war are not the most peaceful on the playing fields of Europe. (H/t Sullivan.)

Photo by Flickr user Crystian Cruz, used under a Creative Commons license.

Last week I was at a conference in Singapore on the future of regional security architecture. From the discussions held and my own deliberations about them, I arrived at five thoughts on the Rudd Government's Asia Pacific community (APc) initiative: two not so good, two potentially good and one that questions the whole idea of the APc.

Not so good

• It seems clear that many in Singapore have still not bought in to the initiative and Australia's middle power activism.
• More than 16 months after Rudd's 4 June 2008 speech launching the initiative, I still don't really know what the APc is, a problem faced by all the participants at the conference who spoke up about the APc (though it seemed that most, if not all, participants had heard of it). I'm happy that I'm not a DFAT officer in the region trying to explain what the APc is, what it is not, and how it is an improvement on what is already going on. A recent contribution by Richard Woolcott on the East Asia Forum blog will help a bit on this score.

 Potentially good

• Intellectually, ASEAN centrality and the APc are not in conflict. They are actually quite complementary. They share the premise that the future security of non-major powers (middle or less) in the region will be shaped significantly by the interactions of the major powers at a time of power redistribution, and believe that non-major powers should attempt to influence these major power interactions through regional institutions.

A couple of weeks ago, I wrote a post looking at how Japan's idea for an East Asia Community runs counter to Prime Minister Rudd’s Asia-Pacific community initiative (note the lower-case 'c' in Rudd's formulation; Graeme Dobell explains). Since then, regional capitals have had a chance to respond to Prime Minister Hatoyama's East Asia Community idea and more details about its potential membership have filtered out of his new government in Tokyo.

It still seems that the two ideas are far from congruent. Rudd's idea is centred on managing US-China relations. It looks like the US is not even included in Hatoyama's East Asia Community. This could be a very large elephant-in-the-room problem.

Yet, there has been some good news. Foreign Minister Okada Katsuya has called for the East Asia Community to include Australia, New Zealand and India. Singapore has also provided unexpected support for the conceptual basis for Rudd's Asia Pacific community, as Prime Minister Lee Hsien Loong, commenting prior to his visit to Japan, emphasised the need to keep the US engaged in the region. He is quoted in the Straits Times as saying, 'I think that the US has to be part of the Asia-Pacific and the overall architecture of cooperation with the Asia-Pacific', and that regionalism in Asia must always be 'open regionalism'. 

In 2007, Opposition Leader Kevin Rudd, at the last moment, met the Dalai Lama during the election campaign. Then, in his principled Beijing University speech on his first visit to China as prime minister, he argued that:

Some have called for a boycott of the Beijing Olympics because of recent problems in Tibet. As I said in London on Sunday, I do not agree. I believe the Olympics are important for China’s continuing engagement with the world. Australia like most other countries recognises China’s sovereignty over Tibet. But we also believe it is necessary to recognise there are significant human rights problem in Tibet. The current situation in Tibet is of concern to Australians. We recognise the need for all parties to avoid violence and find a solution through dialogue. As a long-standing friend of China I intend to have a straightforward discussion with China’s leaders on this.

Since then, discussion of concerns over Tibet and the 'offering of unflinching advice' by Canberra to Beijing over the human rights situation in Tibet is hard to find, as is evidence that the significant human rights problems of Tibet are improving. Last year, the Prime Minister and long-standing friend of China was (conveniently) overseas when the Dalai Lama visited Australia, though he did note at the time that 'I will see no course to deviate from the practice adopted in the past, which is to meet with him'.

Then, earlier this year, the Department of Foreign Affairs acquiesced to Chinese pressure to exclude, for the first time, Tibet human rights groups from the reception for the delayed annual Australia-China Human Rights Dialogue. And last week, a full two months before the Dalai Lama visits Australia again, the Prime Minister, through a spokesperson, announced a deviation from past practice and ruled out meeting him. 

Actions do speak louder than words, especially when the former contradicts the latter.

The parallels between the first months of the Rudd Government and the first weeks of the new Hatoyama Government in Japan extend beyond proposals for new forms of regional architecture.

The new Rudd Government basked in the warm glow of the global media spotlight early on by signing Australia up to the Kyoto Protocol at the UN climate change summit in Bali. Since then, the politics of climate change in Australia have gotten much messier while the global media coverage has faded and the domestic coverage of the tortured path of the CPRS has heated up.

Likewise, the new Japanese Prime Minister, Yukio Hatoyama, attracted widespread and positive global media coverage for his new Government's public pledge to reduce Japan's greenhouse gas emissions by 25% by 2020 using a 1990 baseline (Japan is already efficient: it is the world's second largest national economy but only the fifth largest emitter).

However, Hatoyama and his new Government is likely to face an even tougher time than their Australian counterparts in turning the initial rhetoric into real climate change policy that has widespread domestic support. The think tank of Japan's main business group, Keidanren, has already questioned the feasibility of the new climate change policy. And Keidanren is not alone.

Photo by Flickr user paulrossman, used under a Creative Commons license.

The Australian government and Prime Minister, when it comes to foreign policy, have been enjoying an Indian summer in the broadsheet media of late. The Australian’s Greg Sheridan has stood up against The Age and Foreign Affairs in favour of  Prime Minister Rudd’s rejected essay. Now, Fairfax’s Peter Hartcher has come to the defence of the Prime Minister’s overseas travel schedule.

The media’s fulsome praise of our leading statesman though seems to have overreached itself and spun out of control.

Hartcher claims that 'This week Japan's new Prime Minister, Yukio Hatoyama, embraced Rudd's concept of an East Asian community and pitched the idea to China's President, Hu Jintao.' Having just come back from Tokyo myself this seems off target. Prime Minister Rudd is calling for an Asia-Pacific community and in the essay submitted to Foreign Affairs focuses on the importance of the US-China relationship in this construct. 

Hatoyama is calling for an East Asia Community that is focussed on getting the Japan-China relationship right. Hatoyama’s community idea may even exclude the United States. Post-war Japan has long had fierce internal debates between Asia Pacific proponents focussed on the importance of US-Japan relations and East Asia proponents that view Japan-China joint leadership in East Asia as the key strategic goal. This is the root of Hatoyama’s East Asia Community idea.

East Asia does not equal the Asia Pacific and Hatoyama’s East Asia Community, though details about it are sparse, is not simply a rebadged version of Prime Minister Rudd’s Asia Pacific community.

Photo by Flickr user United Nations Photos, used under a Creative Commons license.

I am feeling a bit sorry for Prime Minister Rudd. Early on in his reign as Australia's prime minister, he made a speech about an idea for a new 'Asia Pacific Community', making general reference to the European Union and calling for a regional institution that dealt with both economic and security issues. He made this speech before doing the requisite preparatory groundwork, especially in the ASEAN region.

The Rudd speech was quickly pilloried here on The Interpreter, within the wider Australian media and from Singapore. It was criticised for being a speech, not a policy, for catching everyone but the Prime Minister himself on the hop, and (from Singapore critics) for not paying enough deference to ASEAN's self-appointed role as the driving force in regional community building.

Yet the new Japanese Prime Minister, Yukio Hatoyama, seems to have done much the same (actually even more). In his first meeting with Hu Jintao, Hatoyama pushed the idea of an East Asian Community, an idea that appeared in very general terms in the DPJ's electoral manifesto.

While there is much less detail about this community idea then Prime Minister Rudd provided in his first Asia Pacific Community speech, it seems to have some similarities and maybe two huge (for Australia) differences. The similarities:

Last week was a bad one for the Obama Administration's Asia policy. Three decisions in particular seem hard to square with Administration rhetoric and the values America claims to uphold.

Last Friday, the Obama Administration agreed to consider bilateral talks with Pyongyang before the next round (if there is a next round) of Six-Party Talks. It seems North Korea may achieve its long-standing goal of dealing directly with the US and sidelining South Korea and Japan not by becoming more open to giving up its nuclear arsenal but by becoming more belligerent about it.

Pyongyang has won another propaganda victory and one that follows closely after the visit to North Korea by former president Bill Clinton. There is no evidence that Pyongyang has made any commitments on denuclearisation in return for these two victories.

On the same day (actually, late in the evening), President Obama, host of next week's G20 meeting in Pittsburgh, cast doubt on hopes that he will be a quiet but firm supporter of free trade when he slapped tariffs on China's tyre imports upon the request of a trade union. Nicholas Lardy from the Peterson Institute provides more insights into this decision, one that seems to go against the trade commitments the president signed up to at the last G20 get-together.

Two days later, an Obama Administration team arrived in Dharamsala to deliver the news that the president, reversing long-standing presidential practice, would not schedule a meeting with the Dalai Lama when the he visits the US next month. Then-Senator Obama also missed out on meeting the Dalai Lama last year but did send a letter. Coincidentally, Prime Minister Rudd’s travel schedule also precluded him meeting with the Dalai Lama last year.

Photo by Flickr user Lacey_and_Cielle, used under a Creative Commons license.

It seems that BBC News is not a regular reader of The Interpreter. Two weeks ago, we noted that the much feted Exxon-PetroChina deal was not the largest single LNG deal ever signed in Australia. Rather the earlier Santos-Petronas one was. Alas, BBC News still hasn’t got this news.

In 1997-1998, East Asia was hit by its most severe financial crisis in decades. It caused significant short-term collateral damage to the Chinese economy but not enough to knock it off its high-growth trajectory. In 1997-1998, Beijing's decision to keep its exchange rate pegged to the US dollar, despite sharp falls in the exchange rates of the crisis-hit countries and China's continued economic buoyancy, did much to burnish the PRC's East Asian leadership credentials and damage those of the US.

Fast forward eleven years and we can see the same thing happening today at the global level. The global economy is suffering it worst financial crisis in living memory. China's export machine has been hammered but its overall economy continues to forge ahead. In 2008-2009, Beijing's massive fiscal stimulus package, very aggressive state bank lending, and China's continued economic buoyancy is doing much to burnish the PRC's global leadership credentials and damage those of the US.

In 1997-1998, Beijing used its improved leadership standing in East Asia to push for new East Asian regional groupings like the ASEAN+3 process (that excludes Australia) and to start negotiating a wide range of bilateral swap agreements and trade deals with ASEAN countries that will bind Southeast Asia more closely and more predictably to the PRC.

Today, Beijing, with its own vulnerability to the US dollar front of mind, looks like it is trying to do the same thing globally. The two clichés — that history repeats itself and that the Chinese character for crisis combines the characters for danger and opportunity — still do sometimes prove their worth.

Photo by Flickr user Andross, used under a Creative Commons license.

The DPJ, with its slogan 'Japan will change!', has won a landslide victory in an election that saw over 70% of the electorate come out despite an approaching typhoon. The Japanese clearly want change and the DPJ now has to deliver.

When it comes to thinking about Australia-Japan-US triangular relations, four thoughts come to my mind:

1. It is good that Australia, the US and Japan have all recently witnessed changes of government to more left-leaning but still centrist parties after long rule (especially in the case of Japan) by conservative parties. All three leaders see themselves as a new breed of politician distinctly different than those they took power from. South Korea and New Zealand have also recently had changes of government, but in the opposite partisan direction.
2. As with the new Rudd and new Obama governments, the Hatoyama Government will likely spend the next few months struggling with voter expectations and the array of promises it has made to the electorate in order to gain office. As with Australia and the US, climate change policy may prove to be one of the most difficult issues, as the DPJ is promising cuts of 25% in greenhouse emissions by 2020 based on a 1990 baseline year. This is much more ambitious than Australia's CPRS, especially given the differences in baseline years. The awesome scope of what the DPJ is promising and Japan's fiscal nightmare mean that there may well be many more 'non-core' promises that fall to the wayside in Japan than in Australia or Washington.
3. As in Australia, and less so in the US, the new opposition party, the LDP, will likely go through a long bout of internal wrangling and post-traumatic shock meaning that the DPJ may not face a serious opposition threat even if the Hatoyama Government does not live up to expectations.
4. The main foreign policy challenge of the Rudd Government was to get the balance of relations between Washington, Tokyo and Beijing correct and to ensure all three capitals that the change of government in Canberra was a good thing for the respective relationship. The Rudd Government certainly failed with Tokyo early on. For the Hatoyama Government, the key will be balancing relations between Beijing and Washington and ensuring them that the change of government in Japan is a good thing. Not sure where Australia will fit into Japan’s new foreign policy thinking.

What's the biggest LNG export deal Australia has signed with an Asian state-owned oil and gas company? If you have been following the Australian and global news lately you would probably plump for the recent Gorgon deal signed between Exxon Mobil and PetroChina. If one is a keen follower of press releases from Australia's Minister for Resources and Energy, one would also think this.

Yet, bizarrely, under the radar and without a ministerial press release, Australian oil and gas company Santos has partnered with Malaysia's Petronas to supply more LNG to Malaysia than Exxon is signed up to provide PetroChina. This elephant-in-the-room LNG deal with Malaysia, which was announced to the ASX more than two months ago, is not only noteworthy for its massive size, it also heralds a growing diversification of our LNG exports away from traditional Northeast Asian markets.

Just as Australian energy exports have been a key strategic asset in Australia’s relations with Japan, South Korea, Taiwan, the PRC and now India, it looks like they could play a similar role in Southeast Asia.

Malaysia’s Petronas (Malaysia’s largest company) has traditionally been an LNG export competitor of Australia; now it will become one of the largest buyers. It seems Australia's present fixation on the People's Republic of China means we can miss very large developments much closer to home. 

Photo by Flickr user Gaelle CLOAREC, used under a Creative Commons license.

The Lowy Institute itself has been caught by the Australia-China diplomatic storm blowing out of Beijing and, via The Australian, the problem of mixed messages that some see as bedevilling the bilateral relationship. Though, it seems to me the official messages being sent by Beijing are pretty clear and uncompromising: Australia is somehow to blame.

Yesterday, Michael Sainsbury again reported that the Lowy Institute and Caijing Magazine would be hosting a conference in Sydney next month. Today, Rowan Callick, in the same paper, reported that the planned conference has been called off due to sensitivities on the Chinese side. Alas, Rowan Callick is correct and Michael Sainsbury is wrong. Maybe next time Michael will check with either the Lowy Institute (or Caijing) before writing stories about us.

(It should be noted that Malcolm did not contact Michael Sainsbury either before writing this post. Ed.)

Photo by Flickr user World Economic Forum, used under a Creative Commons license.